Chico's invests in air time

For years, Chico's FAS never advertised on television.

The retailer's preferred marketing strategy was printing catalogues and giving discounts to loyal customers. But you may have noticed the company's spots airing recently on such television shows as “The Bachelor,” “Castle” and “Modern Family.”

Besides its flagship Chico's brand, the company also owns women's fashion brands White House | Black Market and Soma Intimates. It also operates the online brand Boston Proper, which it acquired last year. In total, Fort Myers-based Chico's operates 1,294 stores across the U.S.
In a recent conference call with analysts, Chico's CEO David Dyer says the company's new TV-ad campaign is paying off.

That's because Dyer says Chico's television ads are reaching so-called “multichannel” customers. Dyer says that kind of customer is the most important to reach because she shops both online and in the company's stores.

“A multichannel customer spends two times more than our boutique customers only, and three times more than our e-commerce customers only,” says Dyer in a transcript of the analyst call at SeekingAlpha.com. “You'll notice that in every one of our television spots, they sign off by explicitly noting that a product is available both in boutiques and through the Web, no small reason that our multi-channel customer count continues its stellar growth.”

But the TV strategy has a cost, and Dyer declined to cite how much Chico's is spending on the television-ad campaigns. “Nice try, no cigar,” Dyer quipped when one analyst asked how much more Chico's plans to spend on television advertising this year.

In his presentation, Dyer acknowledges that television advertising is expensive relative to other media and that it would be easy to eliminate that expense. But Chico's recently posted 21% growth in net sales in the first quarter, an indication that TV ads have worked so far.